Vermont legalizes importing cheaper Canadian drugs, needs federal approval

Vermont is the first state in the country to pass legislation that could allow the importation of less-expensive prescription drugs from Canada.

Republican Gov. Phil Scott signed the bill Wednesday morning. It was approved by the Legislature with bipartisan support.

“The price for many drugs, especially specialty drugs, has gone sky-high,” said state Sen. Virginia Lyons, a Democrat who co-sponsored the bill. “We’ve found that drugs from Canada are very safe and the equivalent of FDA-approved, and we could keep our costs down by having our own wholesale importer and allow our people to buy at this reduced cost. It’s about time that happened.”

Vermonters wouldn’t get access to the reduced-cost drugs right away. The law directs the state Agency of Human Services to design a workable program. The drugs would also have to meet the US Food and Drug Administration’s safety and effectiveness standards, and they would have to be the ones that “generate substantial savings for Vermont consumers.”

Once the drugs were imported, the law would not allow the state to sell them to other states.

The plan is due by January 1, and if the Legislature approves it, lawmakers would have to come up with a financial plan to pay for the drugs. They’d have to get a wholesaler that would work with them and submit the plan for certification from the US Department of Health and Human Services by July 1, 2019.

It’s unclear whether the federal agency would approve the plan; it did not respond to a request for information.

President Trump held a news conference Friday to discuss his plan to lower drug prices. Importing them was not part of the plan, but on the campaign trail, he talked about importing drugs as one price-reduction strategy.

Health and Human Services Secretary Alex Azar, on the other hand, dismissed the general idea as a “gimmick” in a speech Monday.

Although Canadians often pay less than Americans for their drugs – even some of the same medications – Azar suggested that importing them from Canada wouldn’t work.

“They are a lovely neighbor to the north, but they’re a small one,” he said. “Canada simply doesn’t have enough drugs to sell them to us for less money, and drug companies won’t sell Canada or Europe more just to have them imported here.”

Azar added that the FDA has had concerns that there is no “effective way to ensure drugs coming from Canada really are coming from Canada, rather than being routed from a counterfeit factory in China.”

The pharmaceutical industry would probably agree. “Patient safety must be our top priority, and our public policies should reinforce – not undermine – that commitment,” said Caitlin Carroll, a spokeswoman from PhRMA, a trade group for the pharmaceutical industry.

“It is highly irresponsible for Vermont legislators to promote an importation scheme that would create more avenues for counterfeit drugs to enter the country in the middle of an unprecedented opioid crisis,” she said.

“Lawmakers cannot guarantee the authenticity and safety of prescription medicines when they bypass the FDA approval process, and the Canadian government does not inspect or take responsibility for the legitimacy of prescription medicines shipped to the US. The burden of combating illicit drugs would fall on local law enforcement officials, who lack the capacity to inspect even a small percentage of increased counterfeit drugs but who have witnessed their impact in communities across the state.”

Similar bills have been under consideration in states including in Utah, Colorado and West Virginia, but none has been signed into law.

Lyons seemed to think it might be possible that Health and Human Services would approve the legislation.

“I think once we’ve proven we can do the work and that we can have safe drugs from across the border, I think it would be imprudent on the part of the federal government to deny us,” she said.